New Yorkers divided over 'Obamacare' ruling

The Supreme Court's decision that Congress has the Constitutional right to require citizens to purchase health insurance of pay a penalty got a mixed reaction in New York.

The justices, voting 5-4, said Congress does have the authority to impose the insurance requirement, known as the "individual mandate" as part of its power to levy taxes. With that ruling, the Patient Protection and Affordable Care Act, approved in 2010, is due to take effect as scheduled, in 2014.

At New York City's Health and Hospitals Corp., President Alan Aviles said, "From our perspective, it's a major victory." He said the downside is that the municipal hospital system cares for many of the estimated half a million New Yorkers who will not qualify for insurances under the federal reform because they are undocumented residents. "But this will mean new coverage for more than a million New Yorkers, which will lessen the burden on our safety net."

"We welcome the Supreme Court's historic decision and the impact it will have on patients in New York City and across the country. The Affordable Care Act leads the way to much-needed reform of the health care system—opening doors to meaningful health-care coverage for 34 million Americans," he said, in the statement.

At the Healthcare Association of New York State, President Daniel Sisto also praised the measure, saying it would help make insurance affordable "particularly for those with pre-existing conditions among others who had been effectively shut out of the health insurance marketplace."

The New York Health Plan Association's president, Paul Macielak, said the individual mandate "is integral to community rating and guaranteed issue," since if healthy people aren't forced to buy coverage, New York's high insurance rates would become typical. New York has been a clear example of why the market does not work without the individual mandate, he said, adding that the New York market "is seriously broken."

One coalition of supporters of the act immediately announced a rally set for 5:30 p.m. at Foley Square across from the Federal Courthouse to cheer the decision and urge the state to move forward with implementing its own reforms. The groups include the American Cancer Society, the Community Service Society of New York, and the Committee of Interns & Resident/SEIU Healthcare.

New York already spends $54 billion on Medicaid annually, and its cost of nearly $9,000 per enrollee is the second-highest in the nation, accord to a Kaiser Foundation study. Under the Affordable Care Act, more childless adults in New York will become eligible for Medicaid coverage.

Under the administration of Gov. Andrew Cuomo, New York is already instituting reforms to cut Medicaid costs.

Those include a push to get all patients into "medical homes," or electronically supported networks where doctors coordinate a patient's care to better manage chronic conditions. The medical-homes efforts could help the state achieve another goal: reducing the cost of caring for "dual eligibles," New Yorkers who qualify for both Medicaid and Medicare because they have chronic conditions, mental health problems, drug addiction—and sometimes all three. The state wants to put dual-eligible residents into managed care organizations to prevent crises that lead to costly hospitalizations.

The Cuomo administration has articulated dozens of similar goals as part of its Medicaid Reform Team recommendations that will soon be presented to the Centers for Medicare & Medicaid Services for approval and funding.

Doctors groups were less sanguine. The measure still leaves millions of people uninsured, including an estimated 390,000 undocumented immigrants living in New York state, according to the New York State Health Foundation.

The New York Business Council said the reform measure does nothing to reduce its members' costs in providing coverage for workers. "Employers struggle with high group coverage costs, high state imposed taxes and surcharges and an ever–expanding list of coverage mandates. Nothing in today's ruling helps 'bend the cost curve' or addresses the issues driving health-care costs and utilization in New York state, which make the state one of the most expensive health insurance markets in the nation and [places] a tremendous burden on large and small employers," the group said, in a statement.

A national retailers group expressed "dismay."

"The law wrongly focuses more on penalizing employers and the private sector than reducing health costs," said Matthew Shay, president of the National Retail Federation in Washington.

In a ruling that shouldn't have much impact in New York, which already spends generously on Medicaid, the court said the federal government can't threaten to withhold money from states that don't fully comply.

But Chief Justice John Roberts, writing for the court, said Congress had the authority to impose the insurance requirement under its power to levy taxes.

"It is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income but choose to go without health insurance," Judge Roberts wrote.

The decision on the Patient Protection and Affordable Care Act is the climax to an epic legal fight that featured the longest courtroom arguments in 44 years, a record number of briefs and extraordinary public interest in a Supreme Court case. The case tested both the constitutional powers of Congress and the willingness of the Roberts court to overrule the other two branches of the federal government.

The dispute marked the first time the Supreme Court has considered a president's defining legislative accomplishment in the middle of his re-election campaign. The Supreme Court hadn't considered a law of comparable scope since the justices overturned part of the National Industrial Recovery Act in 1935 during President Franklin Roosevelt's New Deal.

Crain’s New York Business is the trusted voice of the New York business community—connecting businesses across the five boroughs by providing analysis and opinion on how to navigate New York’s complex business and political landscape.